BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $250,000 settlement with an investment broker to resolve allegations that it used bid-rigging to present interest rates to municipal bond issuers looking to reinvest bond proceeds.
Under the terms of the settlement, Tradition (North America) Inc. will pay $250,000 to the state. An ongoing investment obtained through the tainted bidding process will also be used to determine if Tradition owes additional funds to the state.
In 2010, Coakley's office filed a lawsuit alleging that Capital Financial Partners Inc. and its employees, as agents for Tradition, told favored providers how other banks were bidding in order to let them win bids for guaranteed investment contracts with Massachusetts bond issuers. The bids resulted in offering Massachusetts bond issuers less interest than they would have received if the bidding process had actually been competitive.
"This case is part of our ongoing effort to hold financial institutions accountable for bid-rigging in the municipal bond derivatives market," Coakley said. "State entities deserve restitution for any harm suffered, and we intend to make sure they get it. We will work hard to prevent this kind of activity from happening again."
The matter is part of a larger effort by Coakley's office to stop bid-rigging in the municipal bond derivatives market. As part of a multi-state group, Coakley's office previously obtained settlements with GE Capital Market Services, Wachovia, J.P. Morgan Chase Co., UBS, Bank of America and broker Martin Kanefsky. Coakley's office recovered more than $15.75 million for the state and other state issuers of municipal bonds.
In April 2008, Coakley's office and other state attorneys general began looking into allegations that large financial institutions engaged in schemes to rig bids and conducted other deceptive, fraudulent and unfair conduct in the municipal bond derivatives market.
- Sixth Circuit blocks EPA from enforcing 'Waters' rule; W.Va. AG calls decision a 'critical victory'
- N.Y. AG announces settlement with Guardian Industries
- Labor union sues pharmaceutical companies for alleged deceptive business practices
- Calif. residents sue homeopathic manufacturer, claim products do not work as advertised
- Pet food supplier being sued for allegedly using slave labor
- Anti-tobacco group: Too early to know lasting effects of e-cigarettes
- Florida Bar committee, plaintiffs lawyers push for rejection of new standard on expert witness testimony
- New York man sues Shiloh Industries for allegedly misleading stock holders
- Mortgage community not impressed with new CFPB regulations
- Consumer advocacy group says Johnson & Johnson should have cut back on oils years ago